Instead of thinking of the foreclosure decline as a contributing factor to the drop in existing-home sales inventory, however, it is more accurate to say that existing-home inventory levels in the years immediately following the crisis were boosted by unusually high foreclosure levels.

The rental vacancy rate, meanwhile, fell 0.4 percentage points to 7.0 percent on a combination of tighter supply conditions and a rise in demand as homeownership looks like a distant dream for some Americans. In a survey last month, Freddie Mac found 61 percent of adults living in rental housing don't plan to purchase a home within the next three years as housing costs and credit challenges keep them on the sidelines.

According to the group conducting the confidence survey, January's increase—which lifted the index to its highest level since 2004—was driven by an improvement in personal finances, with more consumers reporting increases in household income than any time in the past decade. They're also more optimistic about the labor outlook as job growth continues on a steady track.

The increase in the headline index was driven by a more than four-point improvement in the gauge of consumer expectations, which rose to 75.6.
On the other hand, the Current Conditions Index fell more a point to 98.5. According to Paul Diggle, U.S. economist for Capital Economics, the small decline "could reflect the weaker pace of payroll growth in August or even the slowdown in some measures of housing market activity."

Beginning with the release of the June report last month, the monthly Case-Shiller reports now include an expanded national series going beyond the previously covered 20 markets. Previously, the national series was only released every quarter.